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The Internal Revenue Service (IRS) had taken the initiatives for declaration of overseas undisclosed income and financial assets of US tax residents by introducing Offshore-Voluntary Disclosure Initiatives (OVDI) in the year 2009 and 2011 and Offshore Voluntary Disclosure Programme(OVDP) in the year 2012. Under OVDI & OVDP scheme, tax-payers were required to pay tax on hitherto undisclosed income of earlier eight tax years together with interest thereon and in addition a penalty of 25% / 27.5% resp. of the highest balance of undisclosed foreign bank accounts and other foreign assets last 8 years.

And to capture the information of US tax residents who have not declared their overseas income and assets USA signed Intergovernmental Agreements with 112 countries including India under Foreign Account Tax Compliance Act (FATCA) requiring overseas including Indian Banks, Mutual Fund Houses, Insurance Companies and Brokerage Houses to report accounts showing US citizenship , US address , US POA , or US phone numbers if the balance in such account exceeded US$ 50,000 on 30th June 2014 .

However appreciating the possibilities of ignorance and negligence of tax payers a very liberal declaration scheme requiring payment of penalty of 5% of highest value of overseas financial assets over previous six yearend and that too only of US tax residents was introduced on 18th June 2014 by way of Streamlined Filing Compliance Procedure(SFCP) - one each for for US taxpayers residing in the United States as "Streamlined Domestic Offshore Procedures" 9 SDOP )and for US taxpayers residing outside the US as "Streamlined Foreign Offshore Procedures" (SFOP ) . Brief details and links of IRS websites are :

1. Common conditions for eligibility of Streamlined Filing Compliance Procedure:

.01 Only individual tax payers are eligible.
.02 The tax payer is to certify that non filing is on account of non willful conduct that includes negligence, inadvertence or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.
.03 The IRS should not have initiated either civil or criminal investigation.
.04 Tax payers should have a valid Tax Payer Identification Number(TIN). Individual not having TIN can submit ITIN applications

2. ELIGIBILITYfor SFOP :

.01 The individual should meet Non - Residency requirements in one or more of the most recent 3 years i.e. 2011, 2012, and 2013.
.02 Non-residency requirement applicable to individuals who are U.S. citizens or lawful permanent residents (i.e., “green card holders”) is that the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days.

.03 Whereas in case of Non-residency requirement applicable to individuals who are not U.S. citizens or lawful permanent residents ia that the individual did not meet the substantial presence test and

.04 The individual has failed to disclose foreign income and pay tax under IRS and/or failed to file an FBAR - Form TD-F90-22.1 (Report of Foreign Bank And Financial Accounts) with respect to foreign financial assets.

2. PENALTY :

.01 There is no penalty under Streamlined Foreign Offshore Procedure as against penalty of 5% of highest value of overseas financial assets over previous six yearend under Streamlined Domestic Offshore Procedure.

3. PROCEDURES :

.01 Tax payer must file amended US Tax Returns together with all required information for last 3 years.
.02 One should file delinquent FBAR (New Form FinCEN 114) of last 6 years for which due date has passed.

.03 One should also file Form 8938 for last 3 years ; Form 3520 for inheritance or gifts received ; Form 5471 if 10 % or more shares are held in Indian Company ; Form 8865 if there is 10% or more interest in partnership firm ; Form 8621 if Indian Mutual Funds are held and other specified Forms for previous 3 years for which due date has passed.
.04 One is required to pay tax, interest due in connection with these filings.

.05 Filing of Non wil-ful declarations.

4. Separate details are provided for US tax resident residing in USA and also residing outside USA .